The real estate market has taken a huge beating in the past one year. The recession did not help and neither did the cluttered market both online and offline. As we had observed in a recent post on the subject, there is still no clear leader in the segment. Innovation and differentiation is key in this to growth.
iProperty.com, one of the leading realty sites in India (formerly RealAcres.com) has recently announced the launch of a Pay-per-Performance (PFP) model for its developers. Being claimed as the first Indian online real estate player to do so, the PFP model will let the realty developers to choose to pay for every inbound enquiry (that’s Pay per lead) or pay for access to the iProperty database of interested prospects; called the Pay-per-Potential model.
The model as such is not a novelty, even inside India. Job sites have always provided the option to the recruiters to pay for access to the candidate database or pay for posting an ad. But what is to be seen is if this shall be win-win for the seller as well as the buyer.
The Pay-for-Performance model works a bit differently offline. Here the seller can either choose to commit, say 3% of the house value on the close of sale or pay an upfront amount which is normally half or even one third of the 3% commission the broker stands to get. However, it is considered win-win because not only can the seller now save on some cash (though risking on the ability of the broker to sell the house), the broker too gets paid for the work that shall otherwise go unrewarded if the house is not closed in spite of his/her efforts.
But if we are going to talk about the proposed PFP model of iProperty, it is going to be tough on the buyers. An inadvertent entry into the iProperty database (which currently holds 1,70,265 records) could mean that the person will have to answer calls from spamming brokers for life! iProperty’s revenues come solely from the realty developers and brokers and it is entirely justifiable that they cater to their interests. But do the 1.70 lakh people on the iProperty database know that they are now accessible to any broker who is going to pay iProperty a few thousand rupees? I doubt that!